CEA Sees Slower Growth in ‘07

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The Consumer Electronics Association expects factory-to-dealer sales of consumer electronics to hit $155 billion this year, a 7% increase from $146 billion in 2006 but a cooler rate of growth than years past.

The projection -- from the trade group’s "U.S. Consumer Electronics Sales and Forecasts 2002-07" report, to be released Saturday -- is down from the 13% growth the CEA said the industry saw from 2005-06.

The forecast comes on the eve of the 2007 International Consumer Electronics Show, the world's largest consumer-technology trade show.

"The consumer-electronics industry has outdone itself once again, with revenues totaling $145 billion in 2006, and we're on track for another year of healthy growth," CEA CEO Gary Shapiro said.

CEA senior vice president of industry relations Todd Thibodeaux acknowledged that the 2006 industry growth far exceeded the CEA's conservative forecast at the beginning of the year.

"We originally forecast 8% growth, but when all was said and done, we saw an impressive 13% growth for the year,” Thibodeaux added. “Consumers started the year investing in innovative consumer-electronics products and seemingly never stopped. With the 2007 forecast, we see the consumer love affair with technology continuing at a healthy clip."

Thibodeaux said the display category will continue to fuel industry growth in 2007. "The TV market is setting all-time revenue records,” he added. “CRT-based [cathode-ray tube] sets are giving way to flat-panel displays. The successful ongoing transition to digital television is driving demand in this market space."

The CEA projected that display technologies will continue to be the star category in the industry and account for $26 billion in revenue this year, up about 10% from an estimated $23.6 billion in 2006. All television sets currently manufactured with analog tuners must also contain digital tuners, which is largely responsible for the vast increase in digital-television sales. Unprecedented price declines in plasma and LCD displays are also contributing to growth. For 2007, these flat-panel displays are expected to ship a combined 19 million units.

Next-generation consoles will make the video-game market one to watch in 2007. An analysis of year-end game-console sales reports for 2006 indicated that holiday sales will lift revenue in 2007 to $16 billion, a 23% increase.

MP3 players continue to drive the audio market. The CEA projected that MP3 players will account for 90% of the $6 billion in revenue for the portable entertainment market. A total of 34 million MP3 players shipped in 2006, and an additional 41 million are expected to ship in 2007.

Driving the mobile-electronics market are portable navigation and GPS (global positioning system) devices -- evidence that consumers are continually looking for products that will keep them safe and make their automotive travel easier. A total of 2 million units shipped in 2006, a 66% increase over 2005, and 2007 shipment volumes will continue to propel the market with 3 million units projected to be shipped, generating $1 billion in revenue.

Other product categories that will see substantial growth in 2007 are PCs, accessories and digital-imaging devices. In 2006, shipment volumes of laptops eclipsed their desktop counterparts.

CE-accessory sales also will grow in 2007, to the tune of $11 billion, in large part due to an overall consumer emphasis on portability.

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